Difference Between Adam Smith and Karl Marx

We study many economists and among all economists of the past, Karl Marx and Adam Smith are the most influential and prominent economists. Their theoretical contributions are well-known in their history. They both wrote about many things. Here we study all relevant information about two legendary personalities.

Adam Smith vs Karl Marx 

The main difference between Adam Smith and Karl Marx is that Adam Smith talks about capitalism whereas Karl Marx talks about communism and socialism. Adam Smith supports private ownership whereas Karl Marx supports public ownership. Adam Smith laid the foundation for modern economics whereas Karl Marx laid the foundation for socialist economic theory.

Adam Smith vs Karl

Adam Smith is famous for many things which he wrote. The most well-known book of Adam Smith through which his name was famous all around the world is “The Wealth of Nations” this book is considered an important contribution to the economy. He also advocates a “Free market economy”.

Karl Marx saw the conditions and situation of that time and created his ideas and rules of that time. He saw exploitation as individuals not receiving benefits. Marx is certain about his belief that capitalism leads to greed and inequality. The finest paradigm for political and economic ownership was communism.

Comparison Table Between Adam Smith and Karl Marx

Parameters of ComparisonAdam SmithKarl Marx 
DefinitionAdam Smith wanted an Economy without government regulation.Karl Marx wanted an economy where decisions are made by the government.
Life JourneyAdam Smith lived from 1723 to 1790.Karl Marx lived from 1818 to 1883
Supporting TheoryThe supporting theory of adam smith was Laissez-Faire “The wealth of Nations”.The supporting theory of Karl Marx was Socialism’s “Communist Manifesto”.
Philosopher’sAdam Smith was the Philosopher of a free-market economy.Karl Marx was the Philosopher of Command Economy.
OwnershipAdam Smith had Private ownership.Karl Marx had Public ownership.

What is Adam Smith?

Adam Smith is a famous theorist in the world. He is known as the “Father of Capitalism” and “Father of Economy”. Born in the year 1723 on 16 June (undocumented).in Scotland. He was a well-known philosopher pioneer and Scottish economist of political economy.

“An Inquiry into the Nature and Causes of the Wealth of Nations” and “The Theory of Moral Sentiments” are his great writings. Later, “Wealth of Nation” was regarded as the first modern economics text. He introduced the principle of absolute benefit in that work. Classical Economics, Free Market, Economic Liberalism, Division of Labor, Absolute Advantage, and The Invisible Hand are some of Adam Smith’s most famous theories. At the University of Glasgow and Oxford College, Adam Smith studies social philosophy. He was an outspoken opponent of mercantilism and a proponent of laissez-faire economic principles.

He also proposed the idea of the invisible hand which means the tendency of the free market. He gave the concept of GDP(gross domestic product). His views on labor jobs are that jobs tend to pay higher wages to attract labor. The two prominent ideas of Smith “The Invisible Hand” and “Division of Labour” are also running today’s economic theories. 

What is Karl Marx?

Karl Marx was a well-known writer of economic welfare and German philosophy. Karl Heinrich Marx was his full name. He was a socialist revolutionary, an economist, a critic of political economy, a well-known historian, a political theorist, a sociologist, and a known journalist. He was born in Germany on May 5, 1818.

At the universities of Berlin and Bonn, he studied law and philosophy. Many foundations of the period, as well as the twentieth century, were influenced by his work. Perhaps there are a number of issues that a fresh generation does not examine. He wrote “The Communist Manifesto,” which is considered the most renowned booklet in economic history.  He also wrote the first, second, and third volumes of the renowned book “Das Kapital.”

He was well-known for these two well-known works. Marx’s writings, along with others, constitute the basis of Marxism, a school of thinking and philosophy. He was the eldest surviving kid out of a family of nine children. His father was also a well-known lawyer, and his father made history by producing a number of well-known books that influenced Karl Marx. Reading Adam Smith and David Ricardo’s books also inspired him. However, he pioneered his field of economics.

Main Differences Between Adam Smith and Karl Marx

  1. Adam Smith was an economist from Scotland and he was born in the year 1723 whereas Karl Marx was an economist born in Germany in 1818.
  2. Smith was considered as the father of current economics whereas Karl Marx was the father of Communism.
  3. According to Smith, workers are constantly looking for the greatest job and salaries, whereas, Marx claims that a labor wage war could easily break down our society which could lead to the economy’s demise.
  4. Smith believed in the freedom of everyone by using any capitalistic approach whereas Karl believed in individual freedom.
  5. Smith has a western mindset in his thought whereas Marx believed that socialism have the power to replace capitalism.

Conclusion

Karl Marx and Adam Smith are the two most famous historical economic theorists. We also call them“The father of economics”. They create the modern academic discipline of economics. In today’s era, we still study them in our history books. Though their theory comes up with differences and similarities. But both theories are still applicable to the government.

We can conclude from these theories that our standard of living is higher than the previous generation. So some points need to change according to generation. If you want a deep knowledge of their book and economy then you can read their two famous books. the ideas of Marx have a great impact on society. Historical Materialism is also a famous theory developed by Karl. He believed that capitalism was unsustainable and that a socialist society would inevitably replace the capitalist one that existed at the time.

References

  1. https://www.taylorfrancis.com/books/mono/10.4324/9781315700229/big-three-economics-adam-smith-karl-marx-john-maynard-keynes-mark-skousen
  2. https://books.google.com/books?hl=en&lr=&id=Q8syEAAAQBAJ&oi=fnd&pg=PR10&dq=Difference+Between+Adam+Smith+And+Karl+Marx+(With+Table)&ots=hFsOeQF11r&sig=dd0dt7CTWKiaaMU0Q2gsT_OJP14

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